The Dfinity Foundation’s online blockchain provides smart contract power to the Bitcoin (BTC) network, potentially opening the door to new uses for the leading cryptocurrency.
The Dfinity Foundation announced Tuesday that the Internet computer will use so-called key-chain cryptography to integrate with Bitcoin, paving the way for smart contracts with their BTC addresses located directly on the Internet computer.
Dominic Williams, founder and CEO of the Dfinity Foundation, explained that “smart contracts for computers on the Internet will have access to bitcoin’s liquidity, and bitcoin will have a powerful new smart contracting functionality without the need for insecure, cumbersome and reliable bridging services.”
The smart contracts on the internet computer will contain the associated BTC addresses, giving them direct access to transactions on the bitcoin blockchain. It takes 2 seconds to complete a transaction on an internet computer, compared to 40 minutes in bitcoins. To get around this, so-called “Bitcoin banks” can be used directly on the Internet computer, providing fast transactions of two seconds.
Earlier this year, the Dfinity Foundation launched a $223 million ecosystem development program for developers to support the further development of smart contracts and blocks. The project was launched in 2014 and has received financial backing from some of the largest venture capital firms, including Andreessen Horowitz and Polychain Capital.
Dfinity’s latest effort is part of a broader industry initiative to make Bitcoin cheaper for transactions, decentralize finance and Web 3.0. In January, the open source network Stacks revealed its vision for bitcoin-centric smart contracts using a Tier 1 blockchain with its own bridge.
Several other developers are releasing new apps ahead of the much-anticipated Bitcoin Taproot update later this year. The update received massive support from the mining nodes, paving the way for the soft fork activation in November.
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Although bitcoin has not implemented all the principles outlined in Satoshi Nakamoto’s white paper from 2008, the widespread tool as an electric cash register system, it has emerged as a major alternative asset. The Bitcoin network reached a total market capitalization of over $1 trillion in May before undergoing a broad market correction. Much of this growth is due to increased institutional support for bitcoin as an asset.